Rent vs buy in North Dakota
With today's numbers, over 7 years, renting is ahead in 3 of its 3 cities with 50,000+ people.
Rent or buy across North Dakota's cities
| City | Verdict | 7-year result | Break-even (up to 30 yrs) | Typical home | Rent /mo |
|---|
Sources: Zillow Home Value and Observed Rent indexes. Our rent vs buy method produces the verdicts, using 20% down over 7 years.
Our take on North Dakota
North Dakota leads you toward renting in each of its 3 cities of 50,000+ people. Rent in Fargo runs $1,094 a month, while a typical home there costs $321,568. Over 7 years, renting wins there by $68k. The gap widens in Bismarck: a home priced at $378,242 against $1,242 rent, so renting comes out $78k ahead across 7 years. Grand Forks shows the same result. Rent of $1,149 against a $305,083 home leaves renting ahead by $55k across 7 years. Buying doesn't break even for you in 30 years in any of the 3 cities.
Your math comes out in favor of renting because rents are low across the state. For all renters, the median rent is $954 a month, well under the US median of $1,413 each month. Meanwhile, a typical home is worth $291k. We don't see quick price gains that would build value fast either. Since 1995, home prices rose 4.5% a year, and over the last 10 years they rose 4.1% a year. Such a steady pace can't close the wide gap between rent and buying. Across the state, 37% of households rent, versus 35% in the US, which comes to 122,979 renter households.
Recurring bills also hurt you when you buy in this state. Property tax comes to 0.99% for you, above the US rate of 0.94%. Homeowners insurance also costs you more than the national figure. Here it costs you $1,404 a year, while the US figure is $1,308 a year. Those extra bills cut into your return every year you own the home.
Our take: renting and investing what you save is the better deal in North Dakota. Ownership costs sit above the US average and rents are low in all 3 big cities, so buying never pays off for you within 30 years.